Thursday 28 Mar 2024
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KUALA LUMPUR (March 30): FTSE Russell’s decision to retain Malaysia’s membership in the FTSE World Government Bond Index (WGBI) is a testament to the soundness of Malaysia’s sovereign bond market, while reaffirming the country’s strong macroeconomic fundamentals and resilience, the government said.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the affirmation also serves as evidence to various effective policies and initiatives aimed at continuously improving market accessibility and liquidity.

“The Ministry of Finance (MOF) has also actively participated in many stakeholder engagement sessions in collaboration with Bank Negara Malaysia (BNM) and Financial Markets Association of Malaysia (FMAM) to shape policies on improving Malaysia’s financial market competitiveness, underscored by enhanced governance and transparency through streamlined compliance, regulatory and operational requirements for both local and foreign participants,” he said in a statement. 

Tengku Zafrul noted that prior to this latest announcement, Malaysia had been in the WGBI Watch List since April 2019. The WGBI is a widely used benchmark that currently includes sovereign bonds from over 20 major countries, denominated in a variety of currencies. 

The minister also noted that Malaysia has witnessed foreign inflow of RM41.6 billion into Malaysia’s government bonds since April 2019. 

“Foreign holdings in Malaysia’s government bonds also increased to 24.7% in February 2021, compared to 21.9% in April 2019. 

“As at end 2020, more than half of the total foreign holdings in government bonds consists of long-term investors such as other central banks and governments at 31.5%, global pension funds at 17.7% and insurance companies at 2.6%. 

“In terms of domestic investors, holdings in government bonds are supported by ample liquidity from banking institutions, as well as institutional investors such as Employee Provident Funds and Retirement Fund (Incorporated) (KWAP),” Tengku Zafrul said. 

He said the MOF will continue to collaborate with BNM, the Financial Markets Committee (FMC), Securities Commission (SC), Bursa Malaysia and FMAM to further develop Malaysia’s financial market, as well as improve its standing within the global investment community.

“The MOF would like to recognise the efforts by all relevant parties, particularly BNM, the FMC, SC, Bursa Malaysia and the FMAM, on their joint and continuous efforts in developing the Malaysian financial market in a structured manner,” he added.

Edited ByS Kanagaraju
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